from Jeffery Tucker's Storm Economics in One Lesson:
Then there’s the anti-gouging mania that hits every government executive. They warn with great bravado that no private seller can raise prices more than 10% in the event of an emergency. This defies reality. Storms and impending storms send existing supply and demand matrices into total upheaval.
Prices change, and that’s a good thing. It should go without saying that when things and services are in shorter supply, the price of them goes up. This serves two purposes. It provides a signaling device and incentive for new sellers to jump into the market. It also signals the need for more and alerting consumers to conserve until more arrives. This is good for everyone. Would you rather pay $5 a gallon for water or have no water available for sale at all? That’s the choice.
When government threatens people not to profiteer, it discourages producers from entering the market. And yet this is what they do. One North Carolina paper even editorialized for people to rat out any gougers by turning them in. “It’s a good law, and is made better when the public reports profiteering incidents to authorities.”
Amazing: demonize the people who are providing solutions in time of crisis!
Short-circuiting the pricing process discourages gas stations, water sellers, restaurants, and everyone else in the commercial marketplace not even to bother showing up. Why take the risk when there is no reward? As for the goods and services that are available, they will be depleted more rapidly than they should be.
Lives are at stake here. Yet all the politicians seem to care about is their reputation and power, regardless of the consequences. Long experience tells us that it is not government that serves people well in emergencies, but places like Wal-Mart, Waffle House, and Lowe’s. Of course, these commercial establishments are the ones that the political class tries to shut down. It’s perverse even by government standards.